Contribution limited to $5,500 for under age 50…$6,500 over 50 (earned income must be > contribution)

Income limitations** - (Adjusted Gross Income) of $118-133k for Single; $186-196k for Married Filing Joint

Contributions may be limited by other contributions (i.e. - 401k, Traditional IRA’s)

No employer matching

** While Roth IRA’s do have an income limitation, there's a “Backdoor” strategy to still allow contributions even if income exceeds limitations. Feel free to contact us if you have questions on how you can contribute to a Roth IRA in this situation.

The contribution limits for IRA's applies to all IRA’s. So if the annual contribution limit for your age is $5,500 per year...you can contribute a cumulative total of $5,500 between Traditional and Roth IRA’s.

Strategies to Consider

Contribute to your 401k up to the employer match amount; and then contribute to a Roth IRA.

Some suggest contributing to a Roth while in lower tax brackets, and a Traditional while in higher tax brackets (especially if your future tax bracket will be lower when you distribute the Traditional IRA).

Roth IRA’s allow distributions prior to age 59 ½ without tax consequences, assuming you're withdrawing contributions (not earnings) and the account has been held for over five years.

Always have a 6-12 month Safety Fund before contributing to retirement plans (this eliminates needing to take early distributions should financial trouble hit)

In addition to a Safety Fund, it’s advisable to plan for unexpected expenses (car maintenance, house repairs, etc.) so you can access penalty-free cash at drop of hat for job loss, health problems, etc.

We recommend contributing to a Roth every year that you possibly can! We say this because we see a lot of folks in retirement with all of their money coming from taxable sources (pensions, 401k distributions, rental properties, dividends/interest, etc.). It’s nice to have some non-taxable retirement money to access!